Ford drops another shoe in China

Posted a few weeks ago how Ford has been getting clobbered in China, market share falling from 4% to 1% since 2016. At that time, Ford said it’s Chinese operations would be more focused on building for export, rather than sale in China. That figures, as they are failing to compete in China.

Now,: cuts in CAPEX in China. I have seen this sequence in India. Ford can’t get the GP it wants in China, so it will take it’s ball and go home. The company will probably maintain this “strategy”, until the only thing left is huge SUVs and pickups for North America, because that appears to be the only place they make the GP they want. Very Welchian.

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Almost all of China’s own EV makers will fail. Only a few will survive. China is the worst EV market from a company point of view.

Only Tesla matters in that market because they are way ahead of the game and need the batteries and materials.


I read that some areas in China made it much easier to buy an EV. Internal combustion engine vehicles had long waiting lists for permits. Presumably for less air pollution in some regions.

BYD seems to be strong competition for Tesla there. Are you predicting their failure? Why?


BYD, I do not read about at all.

I have seen some stuff like the rest of us on Telsa. I have probably seen a lot less than most of you on Tesla.

My comments were game theory focused.

The tidbit that might be true about BYD is there models ‘were’ smaller which for now might preclude them from the other major markets.

In China BYD and Tesla will both be okay. How okay I have no clue. For how long okay I have no clue.

In the meantime Tesla needs the batteries.

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Most US automakers failed. Wiki says there were about 3,000. Some died when barely formed. Some lasted a few years. Now, the US is down to two: GM, which was bailed out by the government, and Ford. Chrysler was bailed out by the government, twice, and now is owned by Peugeot.

So, it is entirely reasonable to expect 95% of Chinese automakers to fail.


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The more important question is - which ones will fail? Will it be the least efficient? The ones that attract the fewest customers? The ones that can’t produce with adequate quality? Or instead will it be the ones that aren’t well-connected with government? Or the ones who directly compete with a company owned by the brother-in-law of a powerful politburo member?

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In spite of Cramer’s pumping of companies with exposure to China, some years ago, I never sought out the plays he was pumping, because things can change fast in a repressive dictatorship.

Ever read “The Count of Monte Cristo”? iirc, one man was in prison for being for Bonaparte, and the other was in prison for being against Bonaparte.


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Yep. As far as I am concerned, China is not investable. Neither is any other place that has a tendency to nationalize things (businesses) every few decades.


A year ago I was sitting in an upscale coffee shop in the area. Got to talking with a man whose son was an executive for an American company working in China. The two of them were investing in China because the son could read Chinese and knew the government pronouncements.

Surest way to make money. Surest way to lose money.

Most of it is duds now. The news out of China yesterday the country is having economic troubles.

The difference is I expect the US industrials to rise and lead. China’s are falling back.